29 Jun 2022

 Like everyone else, government is concerned about the impact of inflation on citizens.

To that end it will soon announce contingency measures to cushion consumers, Minister of Finance, Ms Peggy Serame has said.

Speaking in an interview on the side-lines of the ongoing 47th Southern African Customs Union (SACU) summit, Minister Serame said global economic growth forecast had been revised downwards owing to the risks associated with the war in Ukraine, which had resulted in increase of crude oil prices worldwide including in Botswana.

Already, the national Consumer Price Index had reached a whooping 11.9 per cent, she said. “It is worth noting that the current economic performance is of great concern to the entire SACU region, and each member state is looking at how best to address the economic implications brought about by the war,” she said.

Meanwhile the latest Bank of Botswana Monetary Policy Committee Report indicates inflation increased from 9.6 to 11.9 per cent in the months of April to May, which is way above the Bank’s medium-term objective range of 3-6 per cent.

The increase in inflation mainly reflects the upward adjustment in domestic fuel prices effected on May 13, and the latest, on Tuesday this week.

The report says the current high levels of inflation are mainly driven by supply-side factors, which contribute approximately 6.1 per cent  to the prevailing inflation.

“There is significant risk that inflation could remain elevated due to factors that include: potential increase in international commodity prices beyond current forecasts; persistence of supply and logistical constraints to production; economic and price effects of the ongoing Russia/Ukraine war and the uncertain COVID-19 profile,” says the report.  

Further, according to Statistics Botswana, the rise in inflation between April and May mainly reflects the upward adjustment across sectors.

The transport category increased from 23.6 to 31.5 per cent with notable increase in the annual price changes for ‘Food and Non-Alcoholic Beverages’ from 6.1 to 8.3 per cent.

The report also indicates an annual price increase on furnishing, household equipment and routine maintenance from 4.4 to 5.2 per cent.

Restaurants and hotels rates also increased from 4.2 to 4.7 per cent, while clothing and footwear increased from 3.5 to 3.8 per cent.

The report further says that housing, water, electricity, gas and other fuels increased from 7.9 to 8 per cent.

However, the upward pressure on inflation was partially offset by inflation falling with respect to alcoholic beverages and tobacco from 5.3 to 4.7 per cent as well as communication from 0.7 to 0.4 per cent. BOPA